Nigeria Finally Receives $3.4bn IMF Loan, Largest COVID-19 Relief Fund In Africa

 

The Managing Director of International Monetary Fund (IMF), Kristalina Georgieva, said Nigeria has received the $3.4 billion financing assistance it requested in April.

According to Georgieva, out of the forty-loan request received from African countries, the loan given to Nigeria is the largest, and Nigeria must provide receipt.

Georgieva said about 20 countries, including Nigeria, have been able to receive the requested credit due to the pace at which the IMF is working to get capital into the hands of governments battling the fallout of COVID-19 pandemic. She explained that IMF understands the essence of speed at this crucial period.

Allnews had reported that Nigeria requested for emergency loan in a letter the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele and Minister of Finance, Zainab Ahmed, wrote to Georgieva in April. In the Letter seen by Allnews, the Federal Government made several promises in return for the loan. The IMF board approved the loan last week.

Where is the $3.4 billion loan?

Georgieva stated that the $3.4 billion loan has now been disbursed to the CBN days after the IMF board approved Nigeria's request. The interest on the loan is 1%, "We have already disbursed the money to Nigeria. In emergency assistance, once the board approves, we disburse within days to the country and it goes to the Central Bank in dollars before it’s converted to naira for the Federal Government’s use.”

“The conditions are quite favourable. The repayment period is five years, up to two and half years is a grace period and the interest on the loan is 1%. So, in that sense, our members can benefit more directly through the fund from a very low interest rate globally.” Georgieva told CNBC Africa during an interview.

Meanwhile, Nigeria's loan is large because each countries can obtain up to 100% of their quarter in the IMF, and Nigeria obtained the 100%.

IMF's terms and conditions for Nigeria

Georgieva said IMF is not offering loan on the same basis or requirement that it would have done if the economic downturn was caused by internal handlings and not special factors like COVID-19. So, IMF is only requiring two things which are;

(1). Prioritise health system; pay doctors and nurses, sustain hospitals

(2). Prioritise support for the most vulnerable people through safety nets and other programs and to the most vulnerable part of the economy.

IMF tells Nigeria to keep the receipt

She also added that Nigeria was told to spend but keep receipts, "We can't afford accountability and transparency to take the back seat." Allnews had reported that the Federal Government had informed IMF that it will allow its representative probe the external audit of the CBN.

Nigeria had promised that “They (Nigerian authorities) will provide fund (IMF) staff with the necessary central bank audit reports and have authorised the external auditors of the Central Bank of Nigeria to hold discussions with staff,”